Astrapak sells East Rand Plastics to Transpaco for R91.5m
Following its recovery from a “devastating” fire in 2013, JSE-listed Astrapak reported on Tuesday that it would dispose of its subsidiary Astrapak Manufacturing’s East Rand Plastics unit to Transpaco for R91.5-million.
Astrapak aimed to shift its focus to its “operations of scale” within the food, beverage, personal care, pharmaceuticals and petrochemicals markets, using the proceeds from the sale to reduce its current level of gearing.
A January 2013 fire at the polyethylene flexible packaging materials manufacturer led to a significant downsizing of the division, with the insurance proceeds mostly used to reduce Astrapak’s net gearing position.
JSE-listed Transpaco, which would finance the deal from existing facilities and cash resources, would further assume an estimated R13.2-million in long-term liabilities associated with the fixed assets.
The company said East Rand Plastics complemented Transpaco’s expansion strategy, as it provided an opportunity to extend current product offerings to existing customers, the division was highly profitable and cash generative and boasted well-known production processes that were understood by Transpaco, in addition to strong growth prospects and opportunities to further expand municipal, industrial, wholesale and export markets.
The transaction, which remained subject to conditions precedent, including competition authorities’ approval, was expected to be concluded by July 1.
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